Alabama has the third-largest timberland acreage among the Lower 48 states, and wood and wood waste were key contributors to the state's ranking of fifth in the nation in electricity generation from biomass.

Analysis

Last Updated: May 18, 2017

Overview

Alabama’s energy use per capita is high because of demand from the state’s manufacturing base.

Alabama is rich in energy resources, with sizable deposits of coal, as well as some crude oil, natural gas, and coalbed methane reserves.1,2,3 Located on the Gulf of Mexico, southern Alabama consists of coastal plain with a humid, subtropical climate. The state's north includes the southern limits of the Appalachian Mountains.4,5 Alabama's many rivers flow from the Appalachian highlands toward the Gulf of Mexico,6 and several dams along those rivers provide hydroelectric power.7 Forests cover more than two-thirds of Alabama, the third-largest timberland acreage among the Lower 48 states, giving the state ample biomass resources.8

Alabama ranks among the top one-fourth of all states in energy consumption per person9 because of high demand from the state's industrial sector, which accounts for more than two-fifths of end-use consumption and uses more energy than the transportation and residential sectors combined.10 The automotive, chemical, metals manufacturing, forestry, and aeronautical industries are major contributors to Alabama's economy, as are mining and food production.11,12 Despite high energy use for cooling during the hot, humid summers and the widespread use of electricity for home heating, the residential sector and the commercial sector together account for only about one-third of the state's end-use energy consumption. The transportation sector uses about one-fourth of the energy delivered to end users in the state.13,14,15

Petroleum

Oil was discovered in Alabama in the mid-1940s. Today, a small amount of crude oil is produced annually from fields in the northwestern part of the state and on Alabama's Gulf Coast in the southwestern part of the state.16,17,18 Proved crude oil reserves are small—well under 1% of U.S. reserves—but they did rise in 2014 and 2015 as more Alabama land was explored.19,20 Annual crude oil production increased slightly from 2011 through 2013 but was still less than half of the state's 1985 peak output of 21.5 million barrels, and annual production has remained below 10.5 million barrels since 2000.21

Alabama’s three oil refineries can process about 132,000 barrels of crude oil per day.

Alabama has three petroleum refineries. One refinery, the largest in the state, is located near the Port of Mobile. Another refinery is in Tuscaloosa on the Black Warrior River, and the third and smallest refinery is in Atmore. The refineries have a combined capacity of nearly 132,000 barrels of crude oil per calendar day22 and can process a range of domestic and imported crude oils. Refined products include feedstocks for chemical plants, specialty products, transportation fuels, and asphalt for local and regional markets.23,24,25 Alabama receives additional refined products from Texas and Louisiana via two major interstate petroleum product pipelines.26,27

The majority of the petroleum used in Alabama is consumed as transportation fuels, particularly motor gasoline.28 Reformulated gasoline is not required in Alabama, and conventional gasoline can be used year round.29 Counties in the Birmingham area were required to use motor gasoline with a reduced volatility during the summer months, but those restrictions were lifted in 2015.30 Only about 0.2% of Alabama homes heat with fuel oil or kerosene, but 1 in 14 households heat with liquefied petroleum gas (LPG).31

Natural gas

Alabama produces natural gas both onshore and offshore in state waters. The state's annual natural gas production has steadily declined from its peak in 1996, and Alabama currently contributes less than 1% of the nation's total natural gas output.32,33 Three-fifths of Alabama's natural gas production comes from onshore wells, and more than two-thirds of that production comes from coalbed methane—a natural gas derived from coal seams. Alabama's coalbed methane wells are located primarily in the Black Warrior Basin.34,35 Overall, Alabama's proved reserves of natural gas have fallen to about one-third of their peak estimate in 1992 and comprise less than 1% of U.S. proved natural gas reserves.36,37

Alabama production meets about one-fifth of state demand.38,39 Consumers receive natural gas by interstate pipelines, mainly from Mississippi and the Gulf Coast but with a growing share through Tennessee from the Marcellus and Utica shales. Four-fifths of the natural gas entering Alabama passes through, mainly to markets in Georgia and Florida.40 An increasing amount of the natural gas delivered to Alabama customers is going to the electric power sector. Since 2007, that sector has been the largest natural gas-consuming sector in the state.41,42 The industrial sector consumes the second-largest amount. Although about 3 out of every 10 households use natural gas for heating, the residential sector typically uses about 5% of the natural gas delivered to customers, primarily because of the state's mild winters.43

Coal

Mobile, Alabama, is one of the largest U.S. coal ports, handling both imports and exports.

Coal has been mined commercially in Alabama for more than 150 years and supported development of the iron and steel industry in the state.44 Alabama has about 1% of the U.S. coal demonstrated reserve base, and, in 2015, the state ranked 14th in total coal production and 10th in bituminous coal production among the states.45 Alabama produces large amounts of high-quality bituminous coal from both surface and underground mines.46,47,48 In 2016, more than three-fourths of the coal produced in the state was exported, and nine-tenths of the exported coal was metallurgical quality coal for steelmaking. Mobile, Alabama, is the nation's third-largest seaport for exporting U.S. coal, most of which was bound for Europe in 2016. Mobile also was second only to Tampa, Florida, in coal imports.49,50,51 About three-fifths of the coal mined in Alabama for domestic sale is delivered by barge, railroad, and truck to electric power plants in the state. Most of the rest is delivered to coke plants and other industrial facilities in Alabama. Minor amounts are delivered to nearby states.52

Only one-fourth of the domestically produced coal used in Alabama is mined in the state. Wyoming supplies about half of the U.S. coal consumed in Alabama, and all of that coal is delivered to electric power plants, the largest coal consumers in the state. Another one-fourth of domestic coal comes by railroad, river barge, and truck from several other states for use in Alabama power plants and industrial facilities. Coke plants in the state get their coal from West Virginia and Alabama.53 Imported coal, primarily from Latin America, is also used in Alabama.54

Electricity

The Browns Ferry plant has the second-largest nuclear electric generating capacity in the nation.

Alabama is sixth among the states in net electricity generation.55 Coal historically fueled the largest share of electric power generation in the state, but aging coal-fired generating plants have been shut down, including 2,300 megawatts of coal capacity in 2014 through 2016 alone.56 Since 2008, coal's contribution has fallen from more than half to less than one-fourth of Alabama's net electricity generation, while natural gas' share has risen from one-fifth to one-third.57,58 Alabama is the nation's seventh largest generator of electricity from nuclear power. The state's two nuclear power plants, with a total of five reactors, typically produce over one-fourth of the electricity generated in Alabama.59,60 The three reactors at the Tennessee Valley Authority's (TVA) Browns Ferry nuclear power plant in Limestone County have a combined generating capacity of 3,310 megawatts, second only to Arizona's Palo Verde plant in generating capacity among U.S. nuclear power plants.61

Alabama is one of the largest hydroelectric power producers east of the Rocky Mountains, second only to New York.62 Nearly two dozen hydroelectric dams on the state's rivers typically supply about 6% of net electricity generation.63,64,65 Alabama also ranks among the top five states for electricity generation from biomass, much it from wood and wood waste from the state's substantial forest products industry.66,67

The largest share of retail electricity sales in Alabama is delivered to the industrial sector, followed closely by the residential sector.68 Average monthly consumption of electricity in Alabama's residential sector is among the highest in the nation because of high demand for air conditioning during the hot summer months and the widespread use of electricity for home heating during the winter months.69,70 Three out of five Alabama households heat with electricity.71 Power production in Alabama exceeds the state's consumption, and typically one-third of the electricity generated in the state is delivered to neighboring states over high-voltage interstate transmission lines.72,73

Renewable energy

Renewable energy sources supply about 1 in every 13 megawatthours generated in Alabama. The state's hydroelectric facilities provide three-fourths of the renewable electricity generation.74 Almost all the rest of Alabama's utility-scale renewable generation comes from biomass, most of which is generated at industrial facilities.75 Additionally, the state has five commercial biomass pellet plants with a combined annual production capacity of 868,500 short tons, almost 7% of the nation's total productive capacity.76 Alabama does not have any ethanol plants, but the state does have three facilities that produce biodiesel from multiple feedstocks.77 Alabama has no utility-scale wind generation, but there are a few areas along its short coastline and along the spine of the mountains in northern Alabama with modest wind resources.78,79

Alabama's first commercial solar farm, with 75 megawatts of photovoltaic (PV) generating capacity, opened in 2016.80 The U.S. Army, in collaboration with Alabama Power, the state's largest electric utility, is developing large-scale solar projects at three military installations in the state.81 The state's other major electricity provider, TVA, operates two small solar facilities in Alabama, one at a botanical garden and one at a wastewater treatment plant.82 There is little distributed (customer-sited, small-scale) solar capacity installed in the state so far, though several companies have installed systems at their facilities.83

Alabama does not have a renewable portfolio standard but does encourage energy savings and efficiency.84 The state has adopted an energy building code for commercial and residential buildings and energy standards for state agencies.85 TVA and several other electricity providers offer homeowners and businesses financial incentives to save energy or to install renewable energy generation.86